Investor news

Mezzanine Management has provided EUR 23.3 million of mezzanine finance to support the growth of Mogo Finance (Mogo), a non-bank car financing provider operating in the Baltics and Georgia.

The deal was funded through Accession Mezzanine Capital III, Mezzanine Management’s third investment vehicle. The fund is backed by reputable institutional investors, including European Bank for Reconstruction and Development and European Investment Fund.

The funds in this deal are earmarked for developing Mogo’s operations in other countries within the Central and Eastern European region. Mogo is currently the market leader in the Baltics, with a loan portfolio in excess of EUR 38 million comprising 20 000 cars and employing more than 200 people. The firm presently has operations in Latvia, Lithuania, Estonia and Georgia and plans to work with Mezzanine Management to expand the group into other countries. The goal is to make Mogo the leading non-bank car financing firm in the wider Central and Eastern European region over the next few years.

“We look forward to working with Accession Mezzanine Capital III to continue to grow our business. The investment of such a global and reputable investment fund is a strong vote of confidence for Mogo, its shareholders, employees and current strategy. Our new partnership lays down solid foundations for further expansion of the group, and reinforces our belief in our business strategy,”
said Jēkabs Endziņš, board member of Mogo.

Franz Hörhager, Founder Partner of Mezzanine Management, commented:
“We constantly map the market and have seen the Baltics become more attractive and thus active in recent years. The development of the economies there has made the region more interesting for us, evidenced by our signing two deals there in four months. The latest, in Mogo, is in a sector we know well, having backed Masterlease in Poland previously. We believe our experience in this segment combined with the strength of Mogo’s management team means we can work well together in achieving the business’s growth ambitions.”

Mezzanine Management was advised by DELOITTE as well as law firms NORTON ROSE FULBRIGHT, TARK GRUNTE SUTKIENE, ARENDT & MEDERNACH and DLA PIPER.

Mogo was advised by PORTA FINANCE and law firm EVERSHEDS BITĀNS.

Mezzanine Management
is an exclusive advisor to the Accession Mezzanine Capital group of funds, whose total commitments exceeded half a billion euros. The company has been operating in Central and Eastern Europe since 2001 through its offices in Vienna, Warsaw, Bucharest, Budapest and Kiev. The funds’ investment portfolio is diverse and includes over 40 transactions over 10 countries in Central and Eastern Europe. The fund is backed by reputable institutional investors, including European Bank for Reconstruction and Development and European Investment Fund.
www.mezzmanagement.com

Mogo Finance
is one of the fastest-growing non-bank car financing companies in the Baltics and Georgia. It offers its clients standard financial leasing as well as loans secured with a vehicle owned by the client. The company has 28 branches in 26 cities in four countries. The group co-operates with more than 500 car dealerships and employs more than 200 people.

Mogo’s subsidiary in Latvia is 100% owned by the parent company Mogo Finance S.A. In 2014, JSC Mogo issued 20,000 bonds with the total value of EUR 20 million on the debt securities’ list of the Baltic NASDAQ exchange. The deal concluded with Mezzanine Management in June 2015 was aimed to attract additional financing for the development of the company at the group level.

AS "mogo" audited annual report for 2014

2014 was a period of very rapid growth for the Company. Total assets of the Company grew up to 28 million euro, turnover reached 5.8 million euro, EBITDA 2.4 million euro, and net profit of the Company reached 0.54 million euro.

In September 2014 the Company increased its share capital to 5 million euro to strengthen its financial and long-term value. At the end of December 2014 gross value of the lease portfolio reached 22.5 million euro (204% growth in comparison with year 2013).

On 17 March 2014 the Company registered a bond emission for a total amount of 20 million euro at Latvian Central Depository in order to raise additional capital, and on 11 November 2014 the Company included these bonds in Nasdaq Baltic Stock Exchange Debt Security listing, where they are available for public trade. By 8 April 2015 the Company has issued the maximum number of securities 20 000 at the nominal value EUR 1 000 for the total amount of EUR 20 000 000.

AS "mogo" unaudited financial results for the ten month period ended 31 October 2014

posted on 1. december 2014

AS "mogo" (the Company) continues to see rapid growth of business in Latvia. The Company’s interest and similar income for the ten-month period ending on 31 October 2014 totaled EUR 4,602,750, increasing by 154% compared to the same period last year. The Company’s earnings before interest, taxes, depreciation, and amortization (EBITDA) reached EUR 2,201,301 and net profit for the period was EUR 605,497.

AS "mogo" net lease portfolio reached EUR 20,096,836, increasing by 180% in comparison to 2013 year-end results. Customer receivables which were overdue more than 30 days constituted 8% of the net lease portfolio.

The Company’s issued share capital was increased to EUR 5,000,000 in September 2014.

AS "mogo" attracts EUR 19 million in investments by issuing notes

Marcis Grinis, Member of the Board at AS mogo
Daiga Auzina-Melalksne, Head of Exchange Services at Nasdaq OMX Baltic Market

Provider of vehicle finance lease and leaseback services AS "mogo" has issued notes to attract EUR 19 million as financing for its leasing portfolio.

A total of 19,062 notes with an initial nominal value of EUR 1,000 were issued. The annual coupon rate is 10% over a 7-year term with gradual repayment of the principal during the final two years. In accordance with the issue prospectus, AS "mogo" may issue another 938 notes (total nominal value of 938,000 EUR) by 31 December 2015. The notes were assigned securities identification number (ISIN) LV0000801363 and the issue prospectus was registered by the FCMC on 23 October 2014.

AS "mogo" notes are on the Nasdaq OMX Baltic Bond List, where they will be available for free market trading.

„We are happy about AS "mogo" decision to attract financing for their future development in the capital market by issuing bonds,” said Daiga Auziņa-Melalksne, Head of Exchange Services at Nasdaq Baltic Market. „We are also excited to see development of the Baltic fixed income market as these corporate bonds will provide broader investment opportunities for retail and institutional investors in the Baltic region.”

Company management cite refinancing of current loans under more attractive conditions as one of the primary goals of this issue, along with improvement of cash flow, liquidity, and attraction of additional capital for the issuer’s leasing portfolio.

‘Although the company was only founded in 2012, AS "mogo" has already established itself as a market leader in finance lease and leaseback services in Latvia. With its clear-cut offering, quick procedure for evaluating lease applications, extensive cooperation with vehicle dealerships, and a targeted marketing campaigns, the company has been able to offer clients loans with attractive provisions. As a result, the number and total volume of lease agreements concluded has increased dramatically within the past year,’ explained Jekabs Endzins, AS "mogo" Chairman of the Board.

‘AS "mogo" is one of the few financial businesses in Latvia to offer finance lease for purchase of used vehicles without restrictions on vehicle age and with loan terms of up to 6 years. The company’s services have been selected by more than 10 thousand clients in Latvia alone. Today, mogo group companies also operate in Estonia, Lithuania, and Georgia, with plans to expand business to other countries as well,’ Endzins added.

The issue of notes was organised by Baltikums Bank AS.

AS "mogo" is a company that offers classical finance lease and lends against vehicles already owned by clients (a type of service known as leaseback), which is available by filling out an application on the company website, mobile website, over the phone, enquiring with one of more than 200 affiliated car dealerships, or at one of its client service centres in major cities throughout Latvia.

Based on audited financial statements for the first half of 2014, the turnover of AS "mogo" reached EUR 2.2 million, with a corresponding profit of 176 thousand euros.